The development has nearly all of its civil and roading works completed.
But sole director Christopher Allan Holmes of Waiheke Island told Reynolds “an irreconcilable breakdown in the relationship between the company and its financiers led to the current position”.
“The financier and their lawyers had withheld GST payments from dwelling sales resulting in a substantial shortfall in GST owing to Inland Revenue,” Reynolds’ report said.
IRD had issued a statutory demand as a result, Reynolds said, demanding the tax be paid on the sale of those 10 places.
Assets available for security holders and other debts remain unknown at this point.
Creditors are financier Senior Trust Capital, ASB Bank, shareholders, the Queenstown Lakes District Council, lawyers Anderson Creagh Lai and accountants Barr Burgess Stewart of Dunedin.
Senior Trust has previously said it has been associated with Roys Bay Estate since 2016.
Reynolds told the Herald today that Holmes was referring to Senior Trust when he talked about the breakdown in the relationship between the company and its financier. He was not referring to ASB, Reynolds stressed.
Roy’s Bay Estate’s shareholders include Sym Trustee and Dunedin’s Relational Capital.
Roy’s Bay had promoted the project previously: “The development is a unique retirement village offering a mix of stylish single-level units and townhouses for the 55+.”
The Otago Daily Times reported last year how the property was being sold via a mortgagee transaction.
Four Bayleys real estate agents acting for the mortgagee said in a press release the partially developed 1.8ha property at 2 Kelliher Dr and 1 Ashgrove Lane had 10 dwellings on it, in various states of completion.
These were not included in the sale.
That left 1.4ha for sale, there being a scheme plan in place to develop at least 63 houses, last year’s article said.
But district plan rules could allow a new developer to increase the yield or do something entirely different, lead agent Steve Rendall of Auckland said.
Roys Bay Estate marketed itself as a luxury retirement village and lifestyle community and originally planned far more than just 10 homes. Around 73 homes were planned to be built there.
Reynolds told the Herald today one site in Wānaka was being sold by the mortgagee and he was awaiting information about that.
“I’m requiring the various legal parties who acted for Roy’s Bay directly and Senior Trust to hand over their files so I can work through the issues that the director alleges to establish if what he’s set out is the correct position,” Reynolds said.
That would reveal what had happened to the tax on the land already sold, he said.
The GST issues Holmes alleges were as a result of the 10 previous properties that were developed and sold by the company.
Roy’s Bay had sold homes, expecting GST from those sales would be withheld and paid to Inland Revenue.
But Holmes told Reynolds that instead, Senior Trust required all the funds instead to be applied to the loans to repay them.
Yet Roy’s Bay was legally obliged to pay the GST on all 10 sales, amounting to 15 per cent of the sale price, Reynolds said.
Reynolds is now carrying out further investigations.
Senior Trust Capital says it is a well-established investment company that focuses on lending to and investing in New Zealand retirement villages and aged care.
“This booming industry has delivered strong growth for a long time and promises to keep rewarding investors for decades to come,” it says.
Investments listed on its website are The Grove Orewa, Stoney Creek Wānaka and Orewa Sands.
Inquiries have been made with Senior Trust Capital about the dispute and statements made in the liquidator’s report but no response was received.
